The recent World Trade Organization meeting in Seattle was an uncharacteristically dramatic occasion, as thousands of activists from environmental, labor, and other groups succeeded in disrupting the proceedings and stealing the media spotlight. On December 9, a week after the close of the WTO meeting, a panel at AEI considered what went wrong in Seattle and assessed the prospects for further global trade liberalization.
One of the main grievances voiced by the protesters in Seattle, and endorsed by President Clinton, is that the WTO is not sufficiently representative of, or open to participation by, nongovernmental organizations (NGOs). Claude Barfield, the director of trade policy studies at AEI, argued that this complaint is dangerously misguided. He noted that the trade representatives of the countries assembled in Seattle are at least accountable to their governments, most of which are democratic. No such political legitimacy can be claimed for the NGOs.
Gary Hufbauer, a fellow at the Institute for International Economics, argued that the debacle in Seattle was only the latest in a number of setbacks for free trade since the WTO was established in 1994. In his view, no easy strategy is available to free traders for regaining momentum. Pressing ahead to achieve the benefits of free trade will require more political capital in the future than it has for most of the past fifty years. He suggested that the struggle to pass the North American Free Trade Agreement (NAFTA) is likely to be the model for future expansion of trade.
Although the protesters in Seattle were largely credited with breaking down the trade talks, John Richardson, acting head of the European Commission delegation to the United States, listed several other reasons behind the failure of the meeting. Disorganization in the WTO bureaucracy was a major factor, in his view. As the organization gets bigger, its conferences and other activities become a greater challenge, and, in this case, the disorderly atmosphere inside the meetings and the lack of a clear agenda reflected that.
To get the cause of trade liberalization moving forward again, Richardson urged its proponents to concentrate on publicizing the importance of robust trade to economic growth. Citing statistics that worldwide trade has grown four times more rapidly than domestic economic activity over the past fifty years, he argued that "trade has been the motor [of economic growth], and it is clear that many people simply do not realize how much of their prosperity is dependent on it."
AEI Adjunct Scholar Jagdish Bhagwati suggested that another reason for the breakdown of the talks was that the representatives of developing nations were uneasy with both the WTO leadership and the protests of the NGOs. Calls for tighter labor and environmental standards, in this view, represent an attack on poorer countries that, if enacted, would threaten their ability to compete with wealthier nations for trade.
Daniel Tarullo, former assistant to President Clinton for international economic policy, suggested that the Seattle talks failed in part because they lacked a uniting cause around which supporters in the business community and elsewhere could rally. He recommend ed that the WTO not try to press forward with any new measures until it has addressed some of the major fissures within its membership and settled on a new, broadly supported agenda.
